Rupee plummets to an all-time low of 73.80, RBI could opt for a 50 bps hike Noor Arora
The rupee plumbed record lows as global oil prices rose and stocks and bonds weakened on Thursday, heightening speculation that the Reserve Bank of India (RBI) may hike interest rates on Friday more aggressively than earlier expected. A majority of analysts polled by Reuters last week expected a third consecutive 25 basis point increase in the key repo rate, currently set at 6.50 per cent, though speculation has mounted in recent days that the RBI could opt for a 50 bps hike. "Expectations are building for an aggressive rate response, but the policy committee's inflation mandate and the current benign trend, backs the case for a measured 25 bps rate hike," Radhika Rao, an economist at DBS wrote in a note on Thursday. The partially convertible rupee hit a life low of 73.82 per dollar before recovering to 73.62/63 by 0710 GMT. It had closed at 73.3350 on Wednesday.
ARTICLE SOURCE: BS